Bitcoins - about to hit $5,000 per coin today!

[Flexacon]

"Surely you can't be naive enough to think who or whatever Satoshi Nakmoto was didn't have other wallets they sold BTC out of at some point."

Its not a matter of how the sats were later sold. Its the fact that every sat was produced and available to anyone to produce via mining. There was not a single sat pre-mined given to founders (unlike eth and almost all scam alts).

Eth was not pre-mined. Btc was exchanged for Eth. Take fiat out of the equation and let's assume the only medium of exchange that exists is btc (it's fair to do this as no fiat was involved in the btc for eth exchange) Then to say an exchange of btc for something else (Eth) is not a valid exchange would be to say btc itself is not valid.

Eth founders and foundation were open and clear about  taking a percentage, with the promise they'd grow Ethereum. I think they've more than kept that promise. If they eventually present a near perfect final solution to the blockchain trilemma do you think everyone should reject it just because they were smart enough to secure a long runway by selling some eth in 2017?

"Ironically banning centralized exchanges from staking ETH actually helps it towards more decentralization."

Not sure about that, as it does not chance the centralized (and increasingly centralized) nature of Eth,

The amount of staked ETH in centralized exchanges could potentially one day allow for them to coordinate a 51%attack. Not allowing ETH staking on centralized exchanges removes this attack vector.

[Griffith]

You are spreading Ethereum FUD. Because that's all that BTC Maxis can do at this point.

The Ethereum ICO involved the exchange of BTC for ETH, not USD. Vitalik is not a US Citizen and lives in Singapore. So not sure what jurisdiction the SEC will have over him.

Bitcoin first became available to buy, sell and trade on online exchanges in 2010. In April 2011, the price of Bitcoin crossed the $1 threshold for the first time. So what is the difference between an ICO where BTC is exchanged for ETH tokens and being able to exchange USD for BTC in 2010? I fail to see how one would be deemed a security and the other not.

Satoshi was able to mine over 1 million BTC in the early days because he was the first to the gate. That is really no different than pre-mining.

We already have one SEC official claim Bitcoin and Ethereum are not securities. No SEC official has come out and stated Ethereum is a security. And the fact is Proof of Stake Ethereum does not satisfy all he criteria of the Howey Test.

The SEC's job is to protect investors. Where was Gary Gensler when SBF and FTX were defrauding investors? Oh yeah, he was meeting with him and probably having a great time. He failed at his job. The SEC has never been about protecting investors and entrepreneurs. They are really there to advance the agenda of established entities.

The SEC went after Preston Tucker and lost in 1950. But in the process, they destroyed his business and he had to shut down. There's a movie about it starring Jeff Bridges.

https://www.wired.com/2010/01/0122preston-tucker-acquitted/

The SEC is a useless, corrupt entity like the FBI and CIA. All three should be dissolved. They are useless to us.

https://beincrypto.com/eth-pos-is-not-a-security-here-is-why/#:~:text=Ethereum's%20Merge%20has%20led%20to,be%20considered%20as%20a%20security.

How is the Howey test applied to prove an asset, a security
According to The Securities Act of 1933, an investment contract should have three prongs. A contract should satisfy all three prongs. If an instrument does not meet even any one of the prongs, it cannot be considered security.

1. An investment of money
2. In a common enterprise
3. With reasonable expectations of profits derived solely from the efforts of others

The prong one states, “An investment of money” The validators depositing their ETH in the smart contract to validate the transactions and keep the Ethereum blockchain secure is not necessarily “an investment of money.” They are putting ETH as collateral to participate in the PoS mechanism. They are not making a purchase or an investment.

However, this argument may be valid technically. Still, it cannot be considered a solid argument because the ETH deposited as collateral can be viewed as a “risk” and may fall under the investment criteria.

Does Ethereum satisfy the second prong?
Under the second prong, “In a common enterprise,” there are two tests of Commonality:

1.Horizontal Commonality means the individual’s capitals are tied to each other by “pooling of funds.” It is combined by pro-rata distribution of profits. Some believe that staking ETH qualifies horizontal Commonality because the fund is staked in a “common” smart contract, which means “pooling of funds.” It is not pooling because no promoter or central authority has direct control over the staked ETH. The validators stake 32 ETH in a common smart contract, but the staked ETH remains distinct and bound to their node. Validators are incentivized to validate the transactions or slashed if they are involved in some malpractice. There is no impact on all the other validators based on the successful actions or failures of a single validator. Hence there is no pro-rata distribution of profits. Thus the Horizontal Commonality is irrelevant.

2. Vertical Commonality: The vertical Commonality focuses on the relationship between the investor and the issuer/promoter. It is irrelevant in the case of Ethereum because there is no promoter. Ethereum is a decentralized and open-sourced project. Anyone can join the Ethereum network as a validator. They are rewarded or slashed based on their actions through the codes of smart contracts. The rewards they receive are not due to the efforts of any promoters or issuer.

Hence Ethereum fails to satisfy both the test of Commonality. Failure of even one of the prongs proves that Ethereum cannot be considered a security as per the Howey test.

Does Ethereum satisfy the third prong?
The third prong states, “With reasonable expectations of profits derived solely from the efforts of others.”

The staking reward in Ethereum is determined by the validator’s own efforts, as explained earlier. It does not “solely depend on efforts of others.” The validators are putting efforts into maximizing their up-time and remaining connected to the network.

Ethereum fails to satisfy, if not all, but 2 out of 3 prongs. Hence ETH PoS is not a security.

Good post.

[Flexacon]

I'll just set up my own solo staking validators. I have enough ETH for multiple validators. Should have gone that route from the start. The March 2023 Shanghai upgrade will enable unstaking. Then I can get my ETH off Coinbase.

It was a nothing burger. No issues with Coinbase or Eth.

Kraken commingled customer assets so they could harvest higher yeilds with it. This deemed the staking a "security" as it was now custodial staking.

[obsidian]

It was a nothing burger. No issues with Coinbase or Eth.

Kraken commingled customer assets so they could harvest higher yeilds with it. This deemed the "staking" a security as it was now custodial staking.

Agreed. It seems more likely to me that the SEC will crack down on stablecoin staking. Because that competes with government bonds. Staking in volatile assets like Ethereum or Cardano will not impact government bonds.

Bitboy recently opined on this. Completely banning Ethereum or Cardano staking will not fly because the blockchains rely on staking to confirm transactions. ETH or ADA staking is completely different from earning interest on stablecoins.

[SOMEPARTS]

Everybody in here still typing up their crypto hopes and dreams? Never have I seen such un-required complexity and wilful entanglement in a derivative of value. It's like listening to dorks talk about Dungeons and Dragons in the basement when it's summer and everyone is outside. LOL

[Mayday]

This time around staking was where considerable fraud was being done.

No surprise every country wants to ban staking. These mobs go and get leverage against customer deposits or even worse sell customer deposits, why would anyone be against this being fixed?

Regulations in 2023-24 will likely kill a huge number of projects which makes existing projects stronger.

[Flexacon]

This time around staking was where considerable fraud was being done.

No surprise every country wants to ban staking. These mobs go and get leverage against customer deposits or even worse sell customer deposits, why would anyone be against this being fixed?

Regulations in 2023-24 will likely kill a huge number of projects which makes existing projects stronger.

Btc maxis got all horny thinking this was the Eth kill shit. Everyone else was outraged because how dare the SEC interfere with their  staking rewards.

Kraken like you said were the ones who were frauding and actually in wrong.

The irony is that it looks like bitcoins price dropped just after this news was officially released. It wasn't even bitcoin FUD, more bullish for btc. If you look at the US stock charts for the day they went down and dxy went up and btc eventually lined up to the trend. A well worked psyops that wiped some leverage out.

[Flexacon]

Everybody in here still typing up their crypto hopes and dreams? Never have I seen such un-required complexity and wilful entanglement in a derivative of value. It's like listening to dorks talk about Dungeons and Dragons in the basement when it's summer and everyone is outside. LOL

Hopes and dreams? No bro I'm in the utter greed phase.

[Theoak*]

"The Ethereum ICO involved the exchange of BTC for ETH, not USD."

Does not matter how the money was raised. Whether via BTC, cash, or anything else of the value, if there is a fund raise it comes within the SEC mandate. (Otherwise, anyone could do an unapproved IPO simply by requesting payment in BTC).

"Vitalik is not a US Citizen and lives in Singapore. So not sure what jurisdiction the SEC will have over him."

Citizenship is not relevant, but yes country of residence is (for practical purposes). Either way, the exchanges that trade Eth are based in the US can easily be sanctioned, and either way the Ethereum Foundation is an organization which can be served and held accountable.

"So what is the difference between an ICO where BTC is exchanged for ETH tokens and being able to exchange USD for BTC in 2010? I fail to see how one would be deemed a security and the other not."

The difference is in how BTC was launched. BTC was source code, with no project founder raising capital. As you know, even Satoshi has to mine his own coins. This is why almost all alts are unregulated securities, and why US exchanges will likely be banned from facilitating trading of them,


"No SEC official has come out and stated Ethereum is a security."

Not correct. The SEC has been explicitly clear that Eth is an unregistered security. And they have issues very clear warnings to US exchanges on this.

See https://coingeek.com/is-eth-a-security-if-it-wasnt-before-it-is-now/

"The SEC's job is to protect investors. Where was Gary Gensler when SBF and FTX were defrauding investors? Oh yeah, he was meeting with him and probably having a great time. He failed at his job."

Agree, and hence the pressure is now really on given prior lack of action.

"According to The Securities Act of 1933, an investment contract should have three prongs. A contract should satisfy all three prongs. If an instrument does not meet even any one of the prongs, it cannot be considered security.

1. An investment of money
2. In a common enterprise
3. With reasonable expectations of profits derived solely from the efforts of others."

Yes, this is correct. And the courts will determine if satisfied. If it walks, talks, and qwaks like a duck, then its likely a duck. Time will tell.

https://twitter.com/VandelayBTC/status/1623838500188569601?s=20&t=_m4Fwfh3WjZkTllyKz20Sg

[gib]

"Crypto businesses don’t properly safeguard customer assets and often mix them with their own funds. This according to US Securities and Exchange Commission Chair Gary Gensler, who was especially blunt in his assessment of the embattled asset class and its proponents. “This is largely a noncompliant field,” Gensler said in an interview with Bloomberg Television. “They’re commingling customer funds with their businesses.” The negativity from the SEC chief is nothing new. For months he’s been warning of the potential dangers posed by the industry. The regulator has asserted that many tokens and crypto products are really just securities that trade on the blockchain and should be registered with the agency.  Gensler took particular issue with how crypto exchanges often play multiple roles. He suggested their business models can create significant conflicts of interest. “We don’t let the New York Stock Exchange also run a hedge fund and trade on the exchange.” he said. “Why would we do it here?”"

https://www.bloomberg.com/news/articles/2023-02-10/crypto-firms-often-mix-client-funds-with-their-own-gensler-says?

[obsidian]

https://twitter.com/VandelayBTC/status/1623838500188569601?s=20&t=_m4Fwfh3WjZkTllyKz20Sg

Saylor is a clown. It was extremely cringeworthy when he appeared onstage with the other clown Max Keizer who kept yelling "Fuck Elon!". Not a good look at all.

 

Real or not, this is funny!

[obsidian]

"Crypto businesses don’t properly safeguard customer assets and often mix them with their own funds. This according to US Securities and Exchange Commission Chair Gary Gensler, who was especially blunt in his assessment of the embattled asset class and its proponents. “This is largely a noncompliant field,” Gensler said in an interview with Bloomberg Television. “They’re commingling customer funds with their businesses.” The negativity from the SEC chief is nothing new. For months he’s been warning of the potential dangers posed by the industry. The regulator has asserted that many tokens and crypto products are really just securities that trade on the blockchain and should be registered with the agency.  Gensler took particular issue with how crypto exchanges often play multiple roles. He suggested their business models can create significant conflicts of interest. “We don’t let the New York Stock Exchange also run a hedge fund and trade on the exchange.” he said. “Why would we do it here?”"

https://www.bloomberg.com/news/articles/2023-02-10/crypto-firms-often-mix-client-funds-with-their-own-gensler-says?

I agree with him about that. All these crypto entities that failed gave crypto a black eye. They were gambling with customer funds. But nobody blamed the US dollar when Madoff ripped off his victims. For this same reason, crypto assets themselves can't be blamed. Blame assholes like SBF and that Terra Lunatic.

[obsidian]

https://cointelegraph.com/news/ethereum-co-founder-joe-lubin-says-no-chance-eth-is-classed-as-security

Ethereum co-founder Joe Lubin says no chance ETH is classed as security

The ConsenSys founder and Ethereum co-founder said it’s as unlikely as ride-sharing service Uber becoming illegal.

Ethereum co-founder and crypto entrepreneur Joseph Lubin is confident that Ether won’t be classified as a security in the United States.

Cointelegraph spoke with Lubin, Ethereum co-founder and founder of blockchain tech firm ConsenSys, in Tel Aviv at the Web3 event, Building Blocks 23.

Asked if ETH could be classed as a security in the U.S. after Ethereum’s transition to a proof-of-stake (PoS) consensus model, Lubin said:

“I think it's as likely, and would have the same impact, as if Uber was made illegal.”

“There would be a tremendous outcry from not just the crypto community but different politicians and certain regulators,” he added.

In September, Securities and Exchange Commission Chairman Gary Gensler suggested that the blockchain’s transition to PoS might have brought ETH under the regulators’ beat.

Gensler believed staking coins gave “the investing public” anticipation of “profits based on the efforts of others.”

Lubin said he was privy to discussions with the SEC and the Commodity Futures Trading Commission “for many years.”

He said around five years ago the regulators were “just trying to wrap their heads around what tokens were.”

“They thought back then that everything was a security. We — I think — helped them significantly understand lots of tokens are not securities, and then they went away and Gary and team now think almost everything's a security.”

Lubin, however, believes that ETH continues to be “sufficiently decentralized” and pointed to its “many use cases that don’t implicate it as a security.”

“There is no centralized set of promoters or builders that is specifically trying to raise the value of Ether and enrich investors,” he added.

“There's a court system in the United States of America that I think would be supportive of arguments that would be made that it is not.”

Lubin said that regulators appear to be more focused on another aspect of Ethereum at the moment, noting that people he knows close to the action in Washington D.C. say “most of the focus is on stablecoins right now.”

“Everybody's talking about it, freaking out. Calling for things to be done.”

In a Feb. 9 Twitter thread, Coinbase founder and CEO Brian Armstrong responded to “rumors” that the SEC was thinking to ban retail consumers from staking crypto.

Staking is not a security,” he said, adding it would be a “terrible path for the U.S.” if a staking ban was passed noting it was “a really important innovation in crypto.”

“Hopefully we can work together to publish clear rules for the industry, and come up with sensible solutions that protect consumers while preserving innovation,” Armstrong said.

[obsidian]

https://news.bitcoin.com/jpmorgan-estimates-ethereum-shanghai-upgrade-might-bring-more-investors-to-stake-in-the-protocol/

JPMorgan Estimates Ethereum Shanghai Upgrade Might Bring More Investors to Stake in the Protocol

JPMorgan, one of the biggest financial institutions in the world, estimates that the arrival of the next Ethereum upgrade, codenamed Shanghai, will bring more investors to stake their funds in the protocol. The firm believes that this number might reach 60% of the ether issued, a number already staked in other blockchain networks.

JPMorgan Expects Ethereum Shanghai Upgrade to Bring More Funds to the Network

A recent report by JPMorgan has revealed that the upcoming Shanghai upgrade, slated to be applied in March, might bring more capital to the network. The investment bank estimates that Shanghai will bring Ethereum’s stake percentage to the number of other popular proof of stake networks have, more than four times the ether currently staked.

The report explained:

Assuming the staking rate converges over time to the 60% average of other large networks, the number of validators could increase from $0.5 million to$ 2.2 million and the annual yield in ETH would fall from 7.4% today to around 5%.

14% of the issuance of ether is currently staked, and cannot be withdrawn until the Shanghai update is finally applied. Other protocols, like Solana and Cardano, have approximately 70% of their issuance staked, according to data from Staking rewards.

New Staking Trends
JPMorgan also elaborated on the destiny of these new funds that they estimate new investors will be staking. The firm believes that most of these funds will go toward platforms such as Lido, which present several benefits when compared to maintaining hardware infrastructure.

The report states these platforms “give liquidity to staking assets that would otherwise be locked into staking contracts by providing an equal amount of derivative token in exchange for ETH, which can be traded.”

As the report suggests, these derivative tokens can be also positioned in different decentralized finance platforms to compound earnings by also staking them. Also, they facilitate bypassing the requirement of staking at least 32 ether, allowing small investors to also participate in protocol validation tasks in staking pools.

Exchanges like Coinbase and Kraken also offer staking services for Ethereum, but regulatory headwinds might thwart these services in the U.S. Kraken recently stopped its staking programs in the U.S. and was fined $30 million by the SEC to settle on charges of offering unregistered staking services. However, users in foreign countries will also be able to stake their ethereum tokens using these services.

This new configuration of the staking panorama, could result in an even higher concentration of funds in fewer hands, bringing concerns about the resilience of these platforms against attacks in the future.

[Theoak*]

Saylor is a clown. It was extremely cringeworthy when he appeared onstage with the other clown Max Keizer who kept yelling "Fuck Elon!". Not a good look at all.

 

Real or not, this is funny!

Ok.

Just funny Saylor is a world class clown, throw in Nayebe Bukele aswell as he made btc legal tender and all other altcoins securities  in the new bill.

Yet you quote bitboy as a reference guide.

[Flexacon]

Saylor not content with leveraging up to buy bitcoin now wants to start trading futures against spot to generate yield.

He wants to go full degen

[obsidian]

Ok.

Just funny Saylor is a world class clown, throw in Nayebe Bukele aswell as he made btc legal tender and all other altcoins securities  in the new bill.

Yet you quote bitboy as a reference guide.

Bitboy called out SBF / FTX as frauds way before anyone else. I personally was suspicious of SBF the moment I heard about him because I know which tribe he represents. Pure scumbag who was probably injected into crypto via his CEFI connections to discredit and destroy crypto.

Bitboy also regularly calls out dirtbag / greaseball "Dirty Gary Gensler".

Laugh all you want but Bitboy is exposing these frauds. And SBF knows very well who Bitboy is. And most likely also Gary Gensler.

This was before the FTX collapse:

[obsidian]

Saylor not content with leveraging up to buy bitcoin now wants to start trading futures against spot to generate yield.

He wants to go full degen

He needs help. Also a very sleazy move of him to bad-mouth Ethereum and other cryptos. Many people have a lot invested in these projects - and he'd rather see them lose it all so he can pump his Bitcoin bag. Very low-class individual.

Charles Hoskinson also rubs me the wrong way with his constant badmouthing of Ethereum at every turn. Reeks of desperation. I don't hear much badmouthing coming from Vitalik or Lubin about other projects. They have a lot more class.

[blackpele]

He needs help. Also a very sleazy move of him to bad-mouth Ethereum and other cryptos. Many people have a lot invested in these projects - and he'd rather see them lose it all so he can pump his Bitcoin bag. Very low-class individual.

Charles Hoskinson also rubs me the wrong way with his constant badmouthing of Ethereum at every turn. Reeks of desperation. I don't hear much badmouthing coming from Vitalik or Lubin about other projects. They have a lot more class.

Agree 100%

[Griffith]

He needs help. Also a very sleazy move of him to bad-mouth Ethereum and other cryptos. Many people have a lot invested in these projects - and he'd rather see them lose it all so he can pump his Bitcoin bag. Very low-class individual.

Charles Hoskinson also rubs me the wrong way with his constant badmouthing of Ethereum at every turn. Reeks of desperation. I don't hear much badmouthing coming from Vitalik or Lubin about other projects. They have a lot more class.

Agreed.

[Mayday]

Saylor not content with leveraging up to buy bitcoin now wants to start trading futures against spot to generate yield.

He wants to go full degen

He began with an average cost of 13.5k for 500M which would be looking smart today.

Fast forward and his cost is 30k and 30% underwater. It’s like a mental disease took over him. Had he purchased property with all that debt he would be 50%+ up on investment.

If we go sub 10k I wonder what ramifications that will have on his holdings?

[Theoak*]

Bitboy called out SBF / FTX as frauds way before anyone else. I personally was suspicious of SBF the moment I heard about him because I know which tribe he represents. Pure scumbag who was probably injected into crypto via his CEFI connections to discredit and destroy crypto.

Bitboy also regularly calls out dirtbag / greaseball "Dirty Gary Gensler".

Laugh all you want but Bitboy is exposing these frauds. And SBF knows very well who Bitboy is. And most likely also Gary Gensler.

This was before the FTX collapse:

Of course I'm going to laugh because you've been baited by a scammer who was once self proclaimed leader of the xrp army lol. That pathetic meth addict was telling people to buy ftx tokens a year ago while many "OG"s were calling out SBF and crypto casino frauds well before they eventuated.

[Theoak*]

He began with an average cost of 13.5k for 500M which would be looking smart today.

Fast forward and his cost is 30k and 30% underwater. It’s like a mental disease took over him. Had he purchased property with all that debt he would be 50%+ up on investment.

If we go sub 10k I wonder what ramifications that will have on his holdings?

Call it, either he will go down as one of the most idiotic investors of our time or by the time his debt loans materialise (2026-2028?) or he would of pioneered a whole movement and infrastructure for public companies to venture into btc.

I'll call it and say his company(btc holdings) will be one of the most profitable risk adjusted in the space in next 3-5  years.

I believe when he dies he leaves all his btc to his btc learning organisation as he has no kids to pass on his assets.

[gib]

[Flexacon]

Why watch some random clowns video when the actual clown SEC chair has a relevant video on the  subject.

He makes a distinction between how setting up a validator and staking crypto assets yourself does not guarantee a profit (so probably not security) but giving an exchange your crypto that then pools assets from different users together to give a guaranteed staking profit makes it a regulatory risk (security)